Lynn Lake

Recent Project News: Phase 2 Drilling at Fraser Lake Complex (FLC)

Further High Grade Nickel-Copper-Cobalt Sulphides Intersected at FLC (ASX 27th March 2017)

  • Latest drill hole intersects multiple narrow zones of massive to semi massive nickel-copper bearing sulphide mineralisation
  • Fourth hole drilled into a large geophysical anomaly – similar strong Ni-Cu-Co sulphide mineralisation as in previous holes
  • Continues to substantiate high grade tenor of FLC nickel mineralisation
  • Indicates long-lived Ni-Cu-Co sulphide rich magmatic plumbing system
  • Downhole electromagnetic geophysics identifies several conductors for follow-up
  • Drilling on-going

Corazon was recently pleased to provide an update of exploration activities at the Fraser Lake Complex (“FLC”), located just five kilometers south of its 100% owned Lynn Lake Nickel-Copper-Cobalt Mining Centre in Canada.

The Company recently commenced its second phase of drilling at the FLC and reports initial results from the latest completed hole, FLC-2017-010. This hole has intersected multiple zones of magmatic massive sulphide within a gabbro host with strong pervasive levels of sulphide mineralisation. Field-analysis using a hand-held XRF of two fine-grained massive sulphide zones returned results of 5.0% to 12.0% nickel (at approximately 145m downhole) and 2.0% to 2.5% nickel (at approximately 82m downhole), substantiating the high nickel tenor of the FLC mineralisation (Figure 1).

Corazon commenced targeted exploration drilling and ground geophysics at the FLC in January, testing what the Company believes is a significant greenfields nickel-copper-cobalt (Ni-Cu-Co) sulphide discovery. Exploration is focused on a high-chargeability Induced Polarisation (IP) geophysical anomaly (the Matrix Trend) coincident with the interpreted extensions of the feeder zone for the FLC. There appears little doubt that this IP anomaly is a result of multiple magmatic Ni-Cu-Co sulphide events.

Corazon Managing Director Brett Smith stated, “The FLC is an exceptional exploration target. These rocks are exactly what we would expect to see in a long-lived fertile magmatic sulphide system. The sheer volume of sulphide-rich gabbro, along with the high-grade sulphide zones, continues to support and add weight to our belief that this area may host a significant new nickel-copper-cobalt sulphide deposit.”

Drilling
FLC-2017-010 is the fourth hole drilled into the Matrix trend and exhibits similar strong nickel-copper-cobalt sulphide mineralisation to holes FLC-2017-002, -003 and -008 (Figure 2). This hole is situated 80 metres from hole FLC-2017-003, which hosts massive sulphide mineralisation, as previously announced (ASX announcement 15th March, 2017). FLC-2017-010 has been drilled to 475m depth and has intersected significantly more zones of magmatic massive sulphide mineralisation than in the previous drilling. These zones are thin, typically less than 0.5 metres and suggest the injection of multiple pulses of sulphide rich magmatic melt.

Photos of variable mineralisation styles

Figure 1 – Fraser Lake Complex Hole FLC-2017-010 – Photos of variable mineralisation styles
A. Settling globules of magmatic Ni-Cu-Co sulphides – approximately 68m downhole
B. Massive sulphide – 2.0% to 2.5% Ni over 0.5m – approximately 82m downhole
C. Thin bands of semi-massive to massive magmatic sulphides – approximately 128.6m downhole
D. Massive sulphide – 5.0% to 12.0% Ni over 0.3m – approximately 145m downhole
Analysis was completed using a hand-held XRF (Niton) on dry core samples. Such methods provide an indication of the tenor of mineralisation only. They are not considered accurate and cannot be used for the purposes of resource calculations. Assay values were quoted only for the fine-grained matrix material of massive sulphide mineralisation. Results for mineralisation exhibiting coarser sulphides are typically variable and have not been published. Photo Scale = Core Diameter 47.6mm.

Hand-held Niton XRF analysis of the sulphide zones within the core samples substantiates the potential high-grade nature of the FLC mineralisation. While this method of testing can deliver high variability, the analysis of two narrow fine-grained massive sulphide zones at approximately 82m and 145m downhole returned reproducible results of 2.0% to 2.5% and 5.0% to 12.0% nickel respectively (Figure 1). The nickel/copper ratio of these zones were in line with the 2.0-2.7/1.0 ratio of the Lynn Lake Mining Centre.

Four holes have provided an initial test of the large Matrix Trend over approximately 400m in strike, at what is interpreted to be the far northeastern extents of a feeder zone of more than 1.5km in length. All holes have reported significant sulphide mineralisation, in what the Company believes is peripheral to the main target, a large sulphide deposit within the feeder zone of a fertile gabbroic complex.

Drilling of hole FLC-2017-012 has commenced. The hole is located north of holes FLC-2017-003 and -010 and will be the first test of the northern margin of the Matrix Trend at a coincident geophysical and geochemical (nickel) anomaly.

On-going Exploration

The current phase of drilling is expected to continue into April 2017.

Ground geophysics including IP and magnetics is being completed over the interpreted FLC feeder zone, southwest of the currently identified Matrix Trend (Figure 2). This work will be used to define additional drilling targets. Such drilling would be undertaken in a new area not covered by the existing Work Permits; as such, additional Work Permits will be applied for. It is expected additional permitting will be completed in early April.

For more information on the Company’s activities at Lynn Lake, please visit our 2017 ASX Announcements page.

Lynn Lake Project Summary

With completion of the acquisition of the Victory Project, Corazon has secured rights to the entire Lynn Lake Nickel-Copper-Cobalt mining district under two separate agreements; the “Dunlop Agreement” (ASX announcement 9/08/12) and the “Victory Agreement” (ASX announcement 01/04/15).  These agreements consolidate the Lynn Lake Nickel-Copper Field for the first time since its closure in 1976 and create a significant nickel-copper asset.

Bringing the two nickel projects together will improve the economics of any potential mining operation and provide benefits in scale and possible mine life, enhancing the opportunity to take advantage of an appreciating nickel metal price.

The Lynn Lake project area is well serviced with infrastructure and support, and is situated immediately adjacent to the Lynn Lake township. The major Thompson Nickel Refinery is located only 320km from the Lynn Lake Project and is accessible by sealed road, which may assist in the potential development of the project. A rail line links Lynn Lake with the mining town of Flin Flon, approximately 270km to the south (northern 100km of railway line not currently in use).

The Manitoba Provincial Government is supportive and is actively encouraging mineral exploration and mining. The wider Lynn Lake project area carries no historical environmental liability from previous mining activities.

Existing Resources

The Lynn Lake mining centre operated from 1953 until 1976, producing 22.2Mt @ 1% nickel and 0.5% copper at a rate of approximately one million tons per annum.  Lynn Lake is Canada’s fourth largest nickel mining region, only recently surpassed by the Voisey’s Bay Project.

The historical nickel-copper-cobalt sulphide mining at Lynn Lake occurred in two areas.  The “A Plug” and the “EL Plug”.  These plugs are differentiated mafic intrusive bodies which host the mineralisation.

  • The A Plug is larger and hosts the majority of the mined deposits and past production.
    • The EL Plug is a small satellite intrusion that supported the highest grade mine in the field.

The Victory Project has a Canadian (NI 43-101) Measured, Indicated and Inferred Resource of 17Mt at 0.66% nickel and 0.33% copper for the deposits closest to Corazon’s EL Deposit (Figure 1, Table 1).  Work has commenced on converting the NI 43-101 resource to JORC compliance.

In 2010 an interim resource estimate for the EL Plug was completed on drilling conducted or validated by the Company (JORC 2004 Resource – ASX announcement 13/10/10) totalling 1.8Mt at 0.8% nickel and 0.4% copper.  The 2010 Resource has not been updated and as such no new information regarding the resource is being reported.  Work on defining a new resource estimate including the most recent drilling has commenced.Since 2010, Corazon has been predominantly exploring the EL Plug which was the highest grade mine at Lynn Lake, historically producing 1.9Mt at 2.5% nickel and 1.15% copper.

Table 1: Mineral Resource for the EL, N, O and G deposits at Lynn Lake

Deposit

Lower Cut-off Grade

Tonnes

Grade

Contained Metal

NIEQ %

Ni %

Ni %

Cu %

Ni Tonnes

Cu Tonnes

Indicated Resource Category
EL Upper

0.4

1,120,000

0.77

0.34

8,600

3,800

EL Lower

0.6

676,000

0.83

0.40

5,600

2,700

N

0.8

2,990,000

0.86

0.41

25,700

12,300

O

0.8

2,630,000

0.82

0.37

21,600

9,700

Indicated Sub-Total 

7,420,000

0.83

0.38

61,500

28,500

Inferred Resource Category
EL Upper

0.4

645,000

1.55

0.61

10,000

3,900

EL Lower

0.6

292,000

1.01

0.44

3,000

1,300

N

0.8

710,000

0.79

0.39

5,600

2,800

O

0.8

100,000

0.75

0.36

750

360

G

0.8

240,000

0.94

0.39

2,300

940

Inferred  Sub-Total 

1,990,000

1.09

0.47

21,600

9,300

Total

 

 

9,400,000

0.88

0.40

83,000

37,800

Table 1 Notes: Nickel equivalent grades (NIEQ%) are provided as an indicator of value in a multi-metallic deposit.  Lynn Lake has a long history as a nickel, copper and cobalt mining camp.   It is the Company’s opinion that all elements included in the metal equivalent calculation have a reasonable potential to be recovered. Past mining of these deposits on average produced a nickel concentrate, consisting of 14% nickel, 1.5% copper and 0.35% cobalt and a copper concentrate having 30% copper and 0.60% nickel. In this circuit, 85% of the nickel, 93% of the copper and 80% of the cobalt were recovered on average. NIEQ% = (((Cu%*2*22.04622)+(Ni%*7.22*22.04622))/7.22)/22.04622  based on metal prices of Ni = US$7.22 /lb  Cu = US$2.00 /lb.

Lynn Lake Mining Centre Long Section

Figure 1: Lynn Lake Mining Centre long section

In 2011, Corazon discovered a new high-grade sulphide breccia at depth below the EL Mine (refer to Company’s ASX announcements from 2011), a discovery that confirmed the continued prospectivity of the Lynn Lake field, despite the extensive past mine life.

The discovery drill hole (XND001W1 – ASX announcement 28th June 2011) intersected:

  • 23.75m @ 3.34% Ni, 1.54% Cu & 0.079% Co from 731.25 m

With the deepest drill hole to date (CRZ012, ASX announcement 2nd December 2011) intersecting:

  • 44.75m @ 1.55% Ni, 0.65% Cu & 0.044% Co from 773.93m

Including:-

  • 3.85m @ 2.83% Ni, 0.24% Cu & 0.073% Co from 773.93m
  • 11.03m @ 2.31% Ni, 1.01% Cu & 0.062% Co from 784.90m
  • 11.51m @ 2.37% Ni, 0.78% Cu & 0.062% Co from 807.17m

The mineralisation defined by this drilling is not included in the interim resource estimate for the EL Plug (JORC 2004 Resource – ASX announcement 13th October 2010).

Recently Completed Work – JORC 2012 Resource Upgrade

Corazon recently announced (ASX announcement 16/05/15) a JORC 2012 compliant Resource Estimate (“Resource”) for the Lynn Lake Nickel-Copper Project. This estimation combines and upgrades resources previously reported in both JORC 2004 and NI43-101 (Canadian) reporting standards, as well as incorporating some new areas of mineralisation defined by the previous mining operation.

Perth based independent mining consultants Ravensgate defined an Indicated and Inferred Resource of 9.4Mt @ 0.88% nickel and 0.40% copper, for 83,000 tonnes of contained nickel and 37,800 tonnes of contained copper (refer to Table 1 for a break-down of the Resource).

The Resource incorporates the EL, N, O and G nickel-copper sulphide deposits (Figure 1, Table 1) and is the first time a combined resource for the Lynn Lake project area has been defined in-line with Australian reporting standards.

The Resource grade is consistent with the historical grades from the Lynn Lake Mine which operated for 24 years as a large tonnage-low cost mine, before its closure in 1976.

  • For the first time since mining stopped in 1976 reported a resource for the whole Lynn Lake nickel-copper camp and not just on a prospect scale.
  • Identified more tonnes at the EL Plug. In particular, some near surface mineralisation defined by past drilling and mining activities has been upgraded to resource status.
  • Changed the resource category classifications quoted in the Canadian NI43-101 Resource of Measured, Indicated and Inferred for the A Plug (N, O and G deposits) to JORC 2012 Indicated and Inferred Resource classification reflecting a reassessment of the historic nature of the data as resource reporting “modifying factor”.
  • Identified significantly less tonnages than that reported in the NI43-101 “foreign estimate of mineralisation” for the A Plugs N, O and G deposits.  This is due to a much higher lower cut-off grade being used for the current resource statement. However, the Company is confident the larger global mineral inventories previously reported are accurate in their representation of the mineralisation at lower cut-off grades.

Exploration Upside

Within the Lynn Lake Project area there are numerous exploration targets that remain un-tested or not fully tested by previous operators.  The discovery of a high-grade sulphide breccia at depth below the EL Mine is one example.

However, at the EL Deposit there is also significant drill defined mineralisation from surface surrounding the historical mine that has not been included in the resources.  The mineralisation has previously been identified by Corazon as the “Upper-Zone Exploration Target” and may be exploitable by open-pit mining methods (details provided in ASX announcement dated 9th December 2011).  Corazon believes the Upper-Zone mineralisation at the EL Deposit is critical to the recommencement of mining at Lynn Lake and is a priority resource definition target.

Recent discoveries have also been made within the main mining area at Lynn Lake.  In 2008, Western Areas NL (ASX: WSA) discovered the Disco (Maxwell) Deposit with drilling returning 18m @ 1.5% Ni, 0.70% Cu & 0.040% Co from 96m (ASX announcement 23 April 2008); and, in 2010, Prophecy Resources Corp (TSXV: PCY) identified the Tango Deposit with a result of 17m @ 0.6% Ni & 0.30% Cu (ASX announcement 6th December 2010).  These discoveries have not been mined or included in any resources studies.

Additionally, there are numerous mafic/ultramafic intrusives within Corazon’s tenure that have been identified by mapping or geophysics and have yet to be fully tested by modern exploration techniques.

Lynn Lake has an enormous metal endowment localised in a very confined area. The project has excellent prospectivity and it is expected modern geophysical techniques will be of great benefit in exploring the Lynn Lake area.